Kodak stock soared Tuesday, rising 119 percent, or $3.70 a share, closing at $6.80, after the company said it is getting into the digital licensing and cryptocurrency market.
The Rochester-based company is partnering with another called WENN Digital. The companies are launching what is known as "blockchain" technology with the products KODAKOne and KodakCoin. Blockchain is a ledger where transactions of digital currencies, like bitcoin, are recorded.
Kodak is the latest company to enter the cryptocurrency market as Bitcoin makes gains. The Kodak systems will allow photographers to register work that they can license and then receive payment.
At Brighton Securities, Chairman George Conboy says there could be some advantages to Kodak to use the new technology, but he says this recent stock gain is mainly due to speculative investing.
“It doesn’t seem likely to me that introducing a photo linked crypto-coin will be a long term growth strategy for Kodak, but it is possible that use of blockchain technology could be a benefit for some photographers trying to ensure they get residuals for their photographs,” Conboy said.
Conboy added that “blockchain technology that underlies crypto currency will have many legitimate uses in a number of industries. But the idea that any industries or specific companies will be able to make a profitable use of a specific created crypto currency, that’s a much harder leap to make.”
“For many in the tech industry, ‘blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem," said Kodak CEO Jeff Clarke. "Kodak has always sought to democratize photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.”
Kodak’s initial coin offering will open on January 31.
The Associated Press contributed to this story.